What Was Bps Strategy Prior To The Car accident Business Essay

Deepwater Horizon was an just offshore oil-rig located in the Gulf-of- Mexico, possessed by Transocean, leased by BP and deployed by Hyundai. 20th April 2010, during the drilling, a tear in the riser-pipe induced an uncontrollable leakage of petroleum, boasting 11 lives, injuring 17 others. The open fire fed by the oilfield continuing for next 36 time creating the rig sunk in the long run. Disagreement between different stakeholders brought on a wait in taking actions to limit the oil-leakage. This leakage from the oil-field could only be quit after 87 days and nights, resulting approx 60, 000 barrels/day of oil-leakage in to the gulf-of-Mexico creating irreparable harm to sea and coastal ecosystem. Beaches stay closed, tourism and related business suffered, seafood was contaminated and oil killed marine-life over the US-coast. BP on Nov-'12 decided to plead guilty to 14 legal acts related to this event and to pay $4. 5 billion. The potential fine for the spill under the work is $1, 100 to $4, 300 a barrel spilled, (NY Times, 2013). This occurrence also triggered federal government, MNCs and environmental businesses to agree upon and device strict measures on enhancing the safeness of offshore oil-rigs, safeguarding the surroundings, boosting the post-disaster procedures (OCS survey, 2011). this occurrence ruined the strong portfolio value of BP apart from causing it enormous financial reduction. Preparedness is of maximum important, an activity should be devised and positively in-place to deal with such disasters, in this environment, strategies originate in formal programs (Mintzberg and Waters, 1995) : exact intentions can be found [both authorities and MNCs], designed and articulated by central management [government], supported by formal adjustments to ensure complete adherence [by MNCs], to increase preparedness for disasters in an controllable or predictable manner- mainly this approach converges towards planned-approach. Despite of BP's determination towards maintaining readiness to answer on larger-scale, to minimize damaging-effect and facilitate mitigation activities- the magnitude of the deepwater occurrence was tremendous in magnitude and unprecedented which captured BP in its mitigating strategy-formulation. Environmental and sociable impact assessment is an inherent part of BP strategy (BP, 2013) which analyses the risk to environment and on man in the neighborhood of such organizations, although state-of-art technologies BP didn't assess the risk of this oil-rig. BP lacked in the collaboration with all stakeholders in handling this devastation. The traditional-way of aerial and satellite television imagery in estimating the genuine deep-underwater situation failed (Jernelov, 2010). Another failure of BP was to control the multimedia in restricting the exaggerated and conflicting facts pass on across worldwide thus harming BP's strong portfolio-value.

Strategy Literature Review

We can associate the idea of tactical space (Fiegenbaum & Thomas, 1990) with the Deepwater-horizon disaster; we would map as the first-step the characteristics of the business enterprise environment, termed as strategic space. Three measurements, a) the levels of organizational strategy (e. g. US authorities and BP-corporate), b) the proper decisions making process (e. g. range, learning resource deployment), and c) the period of time which identifies the extensive characteristics of the tactical space.

First companies need to invest on the well-designed, technically-sound, and exact research, located within a comprehensive framework covering primarily the stable aspects of group habit, then moves gradually to theory development and evaluation of dynamic action (Fiegenbaum & Thomas, 1990). MNCs and authorities need to become listed on hand to get on the analysis of this incident to recognize the root-cause of the failure and then consent to devise enhanced precautionary steps for such future situations. It is clear that traditional countermeasures failed, which necessitates for a fresh strategy of risk-management. In the aftermath of this, US govt is taking significant options to boost regulatory oversight on offshore drilling (OCS survey, 2011). We can see competition as a vibrant process where firms continually take actions to outperform one another (Rindova et al, 2010), once one competition faces such catastrophe the other company eagerly willing to have the benefit of the situation by airing negative campaign and aggressive advertising campaign [e. g. as Shell performed]. During such disasters we can dispute a firm's decisions - as a series of competitive activities - provides audience with necessary cues in framing impression about any of it, as well as assessing it to other players in the same market. Companies' competitive actions thus act as a dynamic mechanism for stable specific reduction of ambiguity. Introduction period [of such devastation] which we concentrate is relatively short and creates a active environment where companies [BP] need to make quick changes in their strategies giving an answer to the changing need of the ground-situation, Rindova et al (ibid). Deepwater-horizon or such situations are huge in magnitude and poses significant capacity to cause destruction - we need to present -out-of-the-box thinking and improvisation/advancement to devise strategies to fight with such situation - the energetic aspect of such occurrences requires quick action taking capacity [in the conditions of financial, technological source].

Insurance [and reinsurance] companies also come under opportunity during such occurrences - their risk evaluation process need to be enhanced and usual check-up should be strict. Product diversification and size proportions are two such aspects that requires close inspection while deciding the value of such huge installations Fiegenbaum & Thomas (ibid). Using a good strategy and right execution of the same is essential for a good-management (Thompson et al, 2012) - all stakeholders have to have a well-defined strategy in-place to control such disasters and absolute adherence is necessary when calamities arise. The strategy have to be adaptable enough to adept itself responding to the actual ground-situation [responses loop]. A intentionally emergent procedure might be useful Mintzberg & Waters (ibid). MNCs need to be made dependable to change themselves through the unexpectedly difficult business-environment by executing strategic security and techniques that enables those to overcome the adversity Thompson et al, (ibid). But at exactly the same time authorities also can't get away its obligations. Off course a good strategy is essential to obtain and sustain market-position strong enough so that the firm is competent to produce profitable financial performance despite unexpected occasions/external factors [e. g. catastrophe, natural calamity or potential competition].

A review on BP Strategy

What was BP's strategy prior to the accident?

BP being truly a respected company adheres to a higher set of criteria in everyday work (BP, 2011). Business doesn't happen in vacuum, the area and time is important (Parry et al, 2007)- stakeholder theory (Donaldson and Preston, 1995) stresses on considering all stakeholders [in the surroundings in which company runs - not only the shareholders' interest] strategy-making. Several stakeholders and their competitive interest are associated with such huge installations. BP needs to respect this and keep maintaining balance among all such communities while making their strategy. BP seemed to follow a deliberate way until this event.

BP says its objective as 'create value for shareholders' (BP, 2011) - it being truly a global MNC needs to be responsible towards environment and folks in your community it operates. Safeness continued to be top-priority for BP, when devastation happens BP must be adaptable enough to respond to the situation and devise steps to control the aftermath- we discovered that they spent three days in talking about the methodology. Constructive dialogue with all stakeholders and fast action in such cases is needed. Authorities, local-people, environmental-organizations, employee and shareholders, viewpoints from all is highly recommended during formulating the strategy - which lacked in the case. This occurrence also demonstrates neither government nor BP was prepared to sustain such devastation - this shows an apparent shortage from BP's part in conducting appropriate risk diagnosis (OCS survey, 2011). Experts conclude that disaster might have been prevented, preparedness and prompt-action is pivotal in controlling such devastation.

Analysis of BP actions in light of the tactical frameworks

Resource based mostly view

VRIO resources for BP is - its strong collection value [inimitable and unusual], its technical competence [valuable and exceptional], financial and organisational durability [valuable]. BP has lost two of its VRIO resources, caused by this incident; its brand-value and financial-strength [to pay the huge fine]. BP lacked the technical-expertise to enough time incident and then failed to restrict the leakage - it lost its valuable and uncommon resources [infrastructure, individuals life]. The misconception of inimitable technical experience of BP and its strong profile value were shattered by the event. It is an enormous loss for a firm.

Approach structured view

BP followed a planned approach in dealing with this unprecedented disaster and their lack of being versatile and adapting/enhancing strategy to mitigate this series of events induced the constant oil-leakage for 87 days and nights. In addition they lack the coordination with different stakeholders and discussions on approach avoided them three times to take measure. Consensus approach could have been key Mintzberg & Waters (ibid) as they have to take insight from US government businesses, environmentalists and other lease-partners to devise the most appropriate damage control device. Flexibility and transparent communication could have been key in estimating the harm and make containment plains where BP failed in building consensus and keep maintaining transparency about the genuine size of the devastation. A combo of emergent [taking insight from all stakeholders] and Umbrella way would have been reduce the damage. Ideological procedure, Mintzberg & Waters (ibid) where collective eye-sight of all stakeholders are well known may have been useful.

Five-Force analysis

BP has strong supplier groups [US federal government, Transocean, Hyundai] - these are few and offer highly differentiated products so they create significant menace to the industry (Porter, 2008/1979). BP suffered here as with future these suppliers would either expel BP [US govt already do - a ban on future explorations by BP in US] or impose stringent conditions. BP loses its production capability directly impacting its market-share, posing a average danger to BP from strong buyer perspective. Substitutes and new-entrants are of modest hazard but rivalry is of major impact. Shell initiated ambitious plan against BP following this incident, leading to more harm to BP brand-value.


In our time security of the environment is important and such environmental disasters have a huge impact created and multifold by advertising and environment agencies to affect the collection value of the Oil-MNC. Firms had a need to justify their activities to all or any stakeholders including the valuable shareholders. Organizations need to balance between success and responsibility (Air flow, 2012) and display their adherence in a ecological corporate public responsibility. Not only in their eye-sight affirmation but also everyday acts. Guarantee of human safe practices and environmental protection is pivotal for just about any industry; such things remain sometimes neglected in leased oil-rigs, reforms is essential; both at the government level - imposing regulatory steps on quality-control and the firm's internal decision-making process to ensure their political autonomy, technical competence, and their full factor of environmental security (OCS article, 2011). Instead of one-sided blaming MNCs because of this disaster we have to equip ourselves from avoiding such incidents that occurs, suggestions -

Strengthen the collaboration between government-agencies and MNCs,

Firms need to get on R&D to boost spill-response.

Analyze the traditional measures to contain the spill and bring in updates - both Firms and Govt. responsible

BP to invest to enhance its spill preparedness and control mechanisms

Invest on powerful design, leakage way of measuring and containment

Government and BP must ensure fair, transparent damage control and estimating system.

Restore the coastal crazy life and marine food-chain, trust building actions need to used by government to assure the seafood consumers.

Firms and federal need to establish stringent measures to safeguard the human-life on the rig and the rescue-staff.

Long term repair [of the marine life] plan is needed from Federal government funded by BP to mitigate the irreparable lack of the coastal-life.

Government should impose regulations on the financial responsibility of the organizations operating in the area during such disaster

Such confidence-building methods would little by little but steadily enhance the environmental situation of Mexican-Gulf and lessons learned from this disaster would help businesses to enhance their catastrophe preparedness. Disasters induced by blow-outs may occur in future too and investment needed to prevent such situation [failsafe device], if that fails capping of blow-out need to be done swiftly and relief-walls might be suitable to restrict the leakage, Jernelov (ibid). Consensus and umbrella approach, Mintzberg and Waters (ibid) where strategies originate/revolve around consensus- in that multiparty environment attaining consensus is of greatest important, no stakeholder can devise/deploy strategy in single handed. Government needs to develop the restrictions of tolerance and impose safety-mechanisms, within which businesses need to operate and regular checking device should be in location to ensure firms operate of their limits place by government. Corporate and business Social Responsibility can determine the expected action of a company towards its dedication to modern culture and responsibility of conducts for environment - BP must demonstrate this in their future crops.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)